Lesson 6: Discharge of Debts

In this lesson, we will explore the concept of discharge of debts, a key provision in the Bankruptcy Code. Discharge of debts refers to the legal process by which a debtor is released from personal liability for certain types of debts, meaning they are no longer legally required to pay them.

What is a Bankruptcy Discharge?

A bankruptcy discharge is a court order that releases a debtor from personal liability for specific debts. This means the debtor is no longer legally obligated to pay those debts, and creditors are prohibited from taking any action to collect them.

For a more detailed explanation, refer to our dedicated article: What is a Bankruptcy Discharge?. Alternatively, you might find Bankruptcy: Step-by-Step Debtor's Guide an insightful read.

Types of Debts that Can Be Discharged

Not all debts are dischargeable in bankruptcy. The types of debts that can be discharged vary depending on the type of bankruptcy filed. Generally, unsecured debts such as credit card debt, medical bills, and personal loans can be discharged.

Learn more about dischargeable debts in our article: Debts That Can Be Discharged. Also, check out Your First Bankruptcy Case for a deeper dive.

Debts that Cannot Be Discharged

Certain types of debts are exempt from discharge. These typically include child support, alimony, certain taxes, and student loans, among others.

For a comprehensive list, refer to: Debts That Cannot Be Discharged. A good companion read is Bankruptcy Breakthroughs.

The Discharge Process

The process of obtaining a discharge varies slightly depending on the chapter under which the bankruptcy is filed. Below is an overview:

graph TD A["Filing of Bankruptcy"] --> B["Automatic Stay"] B --> C["Meeting of Creditors"] C --> D["Completion of Requirements"] D --> E["Discharge Order"]

Objections to Discharge

Creditors or the trustee may object to the discharge of certain debts or the overall discharge if the debtor has acted fraudulently or failed to comply with court requirements.

For more details, see: Objections to Discharge. You may also find Bankruptcy Law and Practice highly informative.

Practical Insights for Effective Filings

To ensure a smooth discharge process, it is crucial to:

Fully disclose all assets and liabilities.
Complete all required courses, such as credit counseling and financial management.
Attend the meeting of creditors.
Comply with all requests from the bankruptcy trustee.

Note: Failing to comply with bankruptcy requirements can result in the denial of discharge.

Resources for Further Reading

For more detailed information on related topics, check out the following lessons:

Conclusion

Understanding the discharge of debts is crucial for anyone considering bankruptcy. By knowing which debts can be discharged, the process for obtaining a discharge, and the potential obstacles, debtors can achieve a fresh financial start.